Fitch Expects to Rate MMAF Equipment Finance LLC 2015-A

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings expects to assign the following ratings and Outlooks to the class A notes issued by MMAF Equipment Finance LLC 2015-A upon closing of the transaction:

--$153,000,000 class A-1 notes 'F1+sf';

--$150,000,000 class A-2 notes 'AAAsf;' Outlook Stable;

--$250,000,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$125,000,000 class A-4 notes 'AAAsf;' Outlook Stable;

--$155,830,000 class A-5 notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

Stronger Credit Quality: About 88.8% of the pool is publicly rated by a Nationally Recognized Statistical Rating Organization (NRSRO). The vast majority (82.1%) of the pool is rated investment grade by a NRSRO. The credit quality is slightly lower than that of 2014-A due to a decrease in U.S. government contracts, but the quality remains higher than other prior transactions.

Consistent Portfolio Diversification: Obligor, industry, equipment type, and geographic concentrations in 2015-A are more diverse versus the 2014-A transaction and are relatively consistent with 2013-A and prior pools. The top obligor, the U.S. government, totals 11.6%, and the top 10 obligors comprise 52.1% compared to the top 10 of 62.4% and 44.6% in 2014-A and 2013-A, respectively.

Strong Performance: MMAF's securitizations have performed well with minimal delinquencies and losses to date. Additionally, they have had almost no turn-ins and residual realization rates consistently over 100%, with all equipment sold to lessees.

Sufficient Enhancement: 2015-A has 10% total hard credit enhancement (CE) for the class A notes, 100 bps lower than 2014-A, and initial excess spread (XS) totals approximately 0.65%. CE is sufficient to support the loss coverage levels consistent with the expected ratings.

Quality Underwriting and Servicing Platform: MMAF does not originate contracts but purchases them from approved syndicators. However, MMAF demonstrates adequate abilities as an underwriter and servicer, as evidenced by historical performance of their securitizations and managed portfolio. Portfolio Financing Services Company (PFSC) is the sub/backup servicer for 2015-A.

Integrity of Legal Structure: The legal structure of the transaction provides that a bankruptcy of MMAF would not impair the timeliness of payments on the securities.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults or decreases in recovery rates could produce loss levels higher than the base case and could result in potential rating actions on the notes. Fitch evaluated the sensitivity of the ratings to increased obligor defaults in the portfolio by applying 'CCC' ratings to the unrated obligors in the portfolio, stressed down from the 'B' rating applied under the base recommended scenario. Additionally, recoveries were stressed by applying a stress of 50% to the base recovery rates. Fitch's analysis found that the transaction displays relatively little sensitivity to increased obligor defaults and decreased recovery rates. In both cases, the notes showed minimal rating sensitivity.

Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'MMAF Equipment Finance LLC 2015-A - Appendix'. This R&W is compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated March 26, 2015.

For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at '[email protected]'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (August 2014);

--'Global Rating Criteria for Corporate CDOs' (July 2014);

--'Criteria for Rating U.S. Equipment Lease and Loan ABS' (December 2014);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance' (March 2015);

--'MMAF Equipment Finance LLC 2015-A' (April 2015);

--'MMAF Equipment Finance LLC 2015-A - Appendix' (April 2015).

Applicable Criteria and Related Research: MMAF Equipment Finance LLC 2015-A (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865178

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Global Rating Criteria for Corporate CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=753057

Criteria for Rating U.S. Equipment Lease and Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=830328

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863817

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983756

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Fitch Ratings
Primary Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W. Madison
Chicago, IL 60602
or
Secondary Analyst
Andrew Tinari
Analyst
+1 312-368-3127
or
Committee Chairperson
Du Trieu
+1 312-368-2091
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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